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Makerere University MAKERERE UNIVERSITY SOCIAL PERFORMANCE MANAGEMENT IN FINANCIAL INSTITUTIONS: CASE OF PRIDE MICROFINANCE LIMITED BY STEPHEN OMOJONG BSTA (MaK) REGISTRATION NO.: 2012/HD06/502U A RESEARCH PROJECT REPORT SUBMITTED TO THE COLLEGE OF BUSINESS AND MANAGEMENT SCIENCES IN PARTIAL FULFILMENT OF THE REQUIREMENT OF THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION OF MAKERERE UNIVERSITY 2014 DECLARATION I, STEPHEN OMOJONG, declare that the work presented in this research dissertation is my original work. It has never been presented to any other University or Institution of higher learning for the award of any academic qualification. SIGNATURE:…………………………… ……………………………. STEPHEN OMOJONG Date: (Researcher) `i | APPROVAL This is to certify that the research report has been submitted for the award of a Masters Degree of Business Administration with my approval as the University Supervisor. SIGNATURE:…………………………….. Date: ……………………. Festo Tusubira Nyende (Supervisor) `ii | DEDICATION I dedicate this thesis to my parents Mr. Adrian Akeba and Mrs. Margaret Abeete together with my beloved companion Ms. Stella Makula who have stood with me during the testing years leading to this accomplishment. May the good lord continue to bless the good works of your hands. `iii | LIST OF ABBREVIATIONS AND ACRONYMS BoU Bank of Uganda MBA Master of Business Administration MDI Microfinance Deposit taking Institution MFI Microfinance Institution MUK Makerere University PML Pride Microfinance Limited PPI Progress out of Poverty Index `iv | ACKNOWLEDGMENT My greatest gratitude goes to my supervisor Mr. Festo Tusubira Nyende for the counsel he selflessly extended to me during the compilation of this thesis. His inspiring guidance has been a guiding light for me. My family especially Ms. Makula Stella and my new-born son Jayden Akeba Omojong have also been my hidden strength and cause for perseverance in this academic struggle for success. Even if they say that all comes to pass but my memory of your support can never fade. I also extend gratitude to Pride Microfinance Limited, a company that gave me the career opportunity and challenge therein that inspired me to further my education. I would like to say to the employees of Pride microfinance Limited that the work environment that you were all part of helped to achieve both academically and at the workplace. Those paycheques also fuelled my progression. Lastly, to all my colleagues of the MUK MBA CLASS of 2012 I love you all. I however, must point out a few of you; my very close friend and business associate Ronald Nsubuga, my friend Anthony Abbot Ogwang, Paaka Keneth Wesley and Brenda Umtoni may god continue to prosper you. `v | TABLE OF CONTENTS DECLARATION .................................................................................................................................. i APPROVAL .......................................................................................................................................... ii DEDICATION .................................................................................................................................... iii LIST OF ABBREVIATIONS AND ACRONYMS ........................................................................ iv ACKNOWLEDGMENT ..................................................................................................................... v LIST OF TABLES ............................................................................................................................... ix LIST OF FIGURES .............................................................................................................................. x ABSTRACT ......................................................................................................................................... xi CHAPTER ONE ................................................................................................................................... 1 BACKGROUND TO THE STUDY .................................................................................................. 1 1.1 BACKGROUND ............................................................................................................... 1 1.2 STATEMENT OF THE PROBLEM ................................................................................ 2 1.3 PURPOSE OF THE STUDY ............................................................................................ 3 1.3 OBJECTIVES OF THE STUDY ....................................................................................... 3 1.4 RESEARCH QUESTIONS ............................................................................................... 3 1.5 SIGNIFICANCE OF THE STUDY ................................................................................. 3 1.6 SCOPE OF THE STUDY .................................................................................................. 4 1.6.1 Geographical scope ...................................................................................................... 4 1.7 LIMITATIONS OF THE STUDY .................................................................................... 4 1.8 DEFINITION OF TERMS ................................................................................................ 4 CHAPTER TWO .................................................................................................................................. 6 LITERATURE REVIEW ..................................................................................................................... 6 2.1 INTRODUCTION ............................................................................................................ 6 2.2 ABOUT PRIDE MICROFINANCE ................................................................................ 6 2.2.1 Ownership ..................................................................................................................... 6 2.2.2 Performance .................................................................................................................. 7 2.2.3 Governance and Management ................................................................................... 8 2.2.4 Vision: ............................................................................................................................ 8 2.3 CLASSIFICATION OF FINANCIAL INSTITUTIONS ............................................... 8 2.4 HOW SOCIAL PERFORMANCE IS MANAGED ....................................................... 9 2.5 ASSESSING ACHIEVEMENT OF AN INSTITUTION’S SOCIAL MISSION ....... 11 `vi | 2.6 LASTING COMMITMENTS TO SOCIAL PERFORMANCE BEING IMPLEMENTED BY MFIS ........................................................................................................ 13 2.7 SUMMARY OF LITERATURE REVIEW .................................................................... 14 CHAPTER THREE ............................................................................................................................ 15 RESEARCH METHODOLOGY ..................................................................................................... 15 3.1 INTRODUCTION .......................................................................................................... 15 3.2 RESEARCH DESIGN ..................................................................................................... 15 3.2 POPULATION OF THE STUDY .................................................................................. 15 3.3 SAMPLING ..................................................................................................................... 16 3.3.1 Sampling design ......................................................................................................... 16 3.3.2 Sampling Procedure................................................................................................... 16 3.4 RESEARCH TOOLS ....................................................................................................... 18 3.4.1 About the PPI tool ...................................................................................................... 18 3.5 DATA PROCESSING AND ANALYSIS ..................................................................... 19 3.6 VALIDITY AND RELIABILITY OF DATA ................................................................ 19 CHAPTER FOUR .............................................................................................................................. 21 PRESENTATION, INTERPRETATION AND DISCUSSION OF RESEARCH FINDINGS .............................................................................................................................................................. 21 4.1 INTRODUCTION .............................................................................................................. 21 4.2 HOW SOCIAL PERFORMANCE IS MANAGED IN PRIDE MICROFINANCE ..... 21 4.2.1 Social goals in Pride Microfinance. .............................................................................. 22 4.2.2 The strategic objectives: ................................................................................................. 25 4.2.3 The metric for social performance ............................................................................... 26 4.2.4 Use of social performance information to make decisions ...................................... 27 4.3 IS PRIDE ACHIEVING ITS SOCIAL MISSION ............................................................. 27 4.3.1 Age of respondents
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